The council initially backed the pokies lease in a unanimous vote in December but a successful motion to repeal the lease was put by councillor Steve Abboushi in a bid to hear from more voices in the community regarding the plan.

As a result, the lease was up for debate again at this week's meeting, where Cr Abboushi put forward a compromise deal to reduce the length of Essendon's lease to 10 years while enforcing reduced opening hours.

Tied at 4-4, mayor Bob Turner used his casting vote to grant Essendon its bumper lease with no restrictions on opening hours.

Cr Turner's ability to vote on the matter was called into question at the meeting, after the mayor admitted a charity he is the vice-president of, The Gap on Graham Inc, received $300,000 in funding from Essendon, the final installment coming in 2013-14.

The Gap on Graham, chaired by the mayor's wife, is a not-for-profit group focussed on disadvantaged local youth.

Stephen Mayne – a gambling reform advocate and former City of Melbourne councillor – lodged a referral to the Local Government Inspectorate, which is now assessing the matter.

"It's one of the clearest local government conflicts I've ever seen. I hope the inspectorate sends a strong message that this sort of thing can't be tolerated," Mr Mayne said.

Cr Turner told The Age he obtained legal advice clearing him of a conflict, saying he voted for the 29-year lease to "err on the side of what had already been agreed [at the original December council meeting]."

Cr Abboushi said his proposal to shorten the lease and force the venue to shut between 1am-9am would have reduced the level of gambling harm in one of Melbourne's most socio-economically disadvantaged communities.

"I now call on Essendon Football Club to voluntarily vary the lease terms by accepting the modest changes I proposed at last night's council meeting," Cr Abboushi said.

It's understood that the long-term nature of the potential lease is designed to align with the club’s strategy to eventually exit gaming, maximising the value of the asset for a potential sale.

The club, which also owns 101 poker machines at Windy Hill, declined to comment on the matter when contacted.

The Bombers recently posted a $2.3 million profit, however the club still remains in significant debt, largely due to costs associated with the supplements saga. The debt, which totalled more than $11 million in 2016, has been reduced to about $4 million.

Essendon chief executive Xavier Campbell told The Age in December that the Bombers were still determining their long-term pokies strategy.

"What the club does with that asset going forward – clearly we have a medium-term objective to continue to service community groups," Mr Campbell said.

"What our longer-term gaming strategy looks like is something we continue to discuss and challenge."

Melbourne, Geelong and the Western Bulldogs have all planned exits from the gaming industry, while North Melbourne and Collingwood have both divested.